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22 June 2024

Yachts ride property wave

By Amjad Abu El Ezz


Offshore developments such as The Palm and The World are fuelling a boom in Dubai’s yachting industry, with the annual rent for a berth rivalling that of a small apartment.


“Dubai is currently facing a shortage of yacht berths as a result of rising demand for yachts and boats in the UAE and the Gulf. Figures released by Dubai International Marine Club show that Dubai now has about 2,500 berths, whereas it needs 10,000,” said Saeed Hareb, Managing Director of Dubai International Marine Club and Director of Harbours of the Palm projects.


Hassan Al Shaali, Sales and Marketing Manager of Shaali Marina, said: “The shortage has pushed the annual berth rent up in the range of Dh35,000 to Dh40,000. A week or a fortnight costs Dh4,000 to Dh5,000. Most berths now have waiting lists.”


Officials at Dubai’s tourism department told Emirates Business that word has spread about the seaside property developments in sunny Dubai and the emirate is now prominent on the radar of yacht owners and people renting yachts for holidays. European yacht owners and vacationers sailing through the Mediterranean into the Red Sea now do not stop only at Egypt’s Sharm El Sheikh but venture south, rounding the Arabian Peninsula and entering the Gulf waters.


Many of these holidaymakers own waterfront properties in Dubai, in the many projects that have come up recently. And the local property scene, too, has caught on to the lucrative potential of catering to the wealthy with a passion for the waves. In the pipeline is a major expansion of Dubai’s coastline, with projects such as Dubai Maritime City, Dubai Marina, the three Palms, The World and Dubai Festival City – all aimed at potential boat owners and people desiring a marine lifestyle.


“These new projects, as well as the influence of the annual yacht show, has given a fillip to the yachting industry and waterfront real estate in the region,” said Hareb.


The Palm, built by Nakheel Properties, is an important project attracting yacht owners and amateur marine sports enthusiasts. Then there is The World project four kilometres off the Dubai coast, made up of 300 man-made islands in the shape of a world map.


According to early estimates each island will have at least one yacht. The project will also have two large yacht yards, while The Palm Jebel Ali will have six yards, in addition to hundreds of berths.


Emaar’s Dubai Marina has three modern berthing areas on its waterfront, accommodating about 600 yachts. Two of them lie on either end of the 5.3-kilometre-long canal. The third is situated near the Marina Club. The Dubai Marina plans to introduce floating shops, the first of their kind in the Middle East, which will sell supplies needed by yacht owners, including garments and food. There will also be brokers selling the latest cruise boats, as well as a boat rental offices and berthing services. Meanwhile, Dubai Festival City has developed a 25-metre-long yacht marina, while the Dubai International Marine Club has some 210 yachts and a membership of 500.


Hareb said the management of the Palms has plans to increase the number of berths for yachts, and build 15 new marinas in the next 10 years to accommodate some 51,000 boats of various sizes. He said The Palm Jumeirah will add 600 more berths, The Palm Jebel Ali will have 3,500, The World about 5,000 and The Palm Deira 400.


Hareb also said the presence of marinas nearby will add value to existing real estate projects and help promote them worldwide. A large number of waterfront flats and villas are owned by foreigners who either own yachts or rent them for holidays. “Some 10 to 15 big yachts from various countries of the world, including other Gulf Co-operation Council countries, call at Dubai every month,” said Hareb.


The Middle East has about 150,000 yachts in total, including 12,000 in the Arabian Gulf, and 80 factories across the Gulf account for more than 15 per cent of world production.

The UAE, statistics say, leads the Middle East yacht and boat industry with an annual demand of about 1,500 units. Meanwhile, the GCC countries top the list in the buying and renting of yachts, which makes the region a target for European and American companies.


The lack of adequate berthing facilities, however, is slowing down the growth of the local yacht industry.


Al Shaali said: “Customers purchase yachts or boats on the condition that a berth is provided. There is a need to increase investment in yacht and cruise boat terminals in Dubai because their shortage has led to a drop in sales.”


He said Shaali Marina’s sales went up by 60 per cent in 2007, especially of luxury yachts and fishing boats, and attributed this to waterfront projects that provided berths, such as The Palm and the Dubai Festival City. The increase in the number of high net worth individuals in the country who looked at yachting as a lifestyle option was another factor, he added.


Al Shaali expected the new projects being built in Dubai to add only about 400 to 500 berths, none of which will be for big yachts, and said this was not enough for the growth of yacht sales.


Hareb said buyers of yachts include businessmen, officials, senior government employees and princes. Also, European and Australian buyers make up 40 per cent of sales. The quality and reasonable price of local yachts have attracted customers from Belgium, Italy and Britain, among other countries.


According to Al Shaali, Qatar, Saudi Arabia and Kuwait are the most prominent markets for the luxury yacht industry. “Shaali Marina’s sales doubled in 2007 to 30 yachts, from 15 in 2006. The company is now building a 136-foot yacht worth Dh35 million, which will take three years to complete,” he said.


Dubai has the largest yacht in the world – a 160-metre-long (525 feet) vessel formerly called Platinum, owned by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, who bought it from the previous owner Prince Jefri Bolkiah, the younger brother of the Sultan of Brunei. Saudi Arabia has one of the largest – a 147-metre (482 feet) yacht owned by a member of the ruling family.


Waseem Al Shaar, Marketing Manager of Sailor Ship Trading, said demand for yachts will rise 100 per cent rise in the immediate future. “The Palms, The World and Dubai Festival City projects have contributed to the rising demand for luxury yachts. The Middle East and Gulf markets are now witnessing a huge growth in sales. Also, the low production cost in the UAE compared to Europe has attracted European buyers,” he said.


Al Shaar said luxury yacht prices range from Dh1m to Dh18m and pointed out that the problem faced by the yacht industry is a shortage of berths. “Most customers say they will buy only if a berth can be secured.”


The longest yachts in the world


Ranking Name     Length                  Delivery Date       Owner

1 Platinum             160m (524ft 10in)       2006             Government 
                                                                                               of Dubai

2 Sunflower           155m (508ft 53in)       2007             Unknown       

-  Eclipse                147m (482ft 6in)         2008             Roman    

3 Prince Abdul Aziz   147m (482ft 3in)     1984             King Fahd      

4 Al Salamah         139m (456ft 10in)       1999            Crown Prince 
                                                                                 Sultan of Saudi Arabia

5 Rising Sun          138m (452ft 8in)         2004             Larry Ellison, 
                                                      billionaire co-founder of Oracle Corp

6 Octopus                126m (413ft 4in)        2003             Paul Allen, 
                                                                              co-founder of Microsoft 

7 Savarona               124m (408ft)         1931/1992       Kahraman Sadikoglu (leaseholder), head of Dubai-based International Marine Contractors

8 8th Wonder           123m (402ft)         2008/2009       N/A

9 Alexander              122m (400ft 2in)  1976/1986       Latsis family

10 Turama               116m (381ft 9in)         1990/2004       Charter